4G becoming more appealing as fixed internet replacement

Thursday 25 June 2015 | 13:05 CET | Background

Almost half (45%) of Dutch consumers would consider switching to 4G for their home internet if this was cheaper than a fixed connection. Another 43 percent said they would switch to a 4G plan if this was cheaper than the combined cost of their current mobile telephony and internet plans, according to the latest results from the Telecompaper Consumer Panel. 

Price appears more important for respondents than factors such as speed or reliability. Only 34 percent said they would switch to 4G if the speed was at least the same or higher than their existing internet connection, while 36 percent said the reliability of 4G internet would be a reason to switch from fixed broadband.

A fifth said they would switch to 4G only if they could stream (live) TV over the 4G device or on the TV. Just over a quarter (27%) said the 4G plan would need to include internet, TV and telephony to justify the switch.

Speed becoming more important

Compared to previous surveys, speed appears to becoming a more important factor in whether to switch from fixed to 4G internet. Providers are also putting more emphasis on speed, raising the bandwidth offered and focusing on speed in their marketing. In 2013, 30 percent of consumers said they would switch to 4G if it was at least as fast or faster than their current broadband connection. In the latest survey, this figure rose to 34 percent.

At the same time, price is also becoming more important. The percentage citing a cheaper price as a reason to switch to 4G rose from 38 percent in 2013 to 45 percent this year. 

Age, gender differences

In general, men and younger people found most factors more important in considering the switch to 4G. Men were especially concerned with the TV element. Nearly a quarter (24%) of men said they would consider switching to 4G if watching live TV over the connection was possible. Only 16 percent of women felt the same. Thirty percent of men also want 4G to be in a bundle with TV and voice service, compared to 24 percent of women. 

Young people were more concerned about the price. Two-thirds of 12-19 year olds said they would consider the switch to 4G if it was cheaper than their fixed broadband connection, compared to just 23 percent of 65-80 year olds. Over half (54%) of 12-19 year-olds would also switch if it was cheaper than their current mobile voice and data plan, versus 17 percent of over-65s.

LTE not yet replacing fixed in Netherlands

While LTE is already available nationwide from two of the four network operators, none of the service providers are marketing 4G yet as a fixed replacement. LTE is being tested in some rural areas where there is little or poor access to fixed broadband. Vodafone Netherlands said in June 2014 that it was studying how 4G could serve areas without fast broadband over fixed infarastructure. In April 2014 KPN said it would test a combination of fixed and mobile technologies around the town of Loppersum, using a 4G antenna to help boost the ADSL speeds for customers in outlying areas.

In Germany, Vodafone and Telekom Deutschland already offer subscriptions where LTE in part replaces fixed internet. Vodafone Zuhause offers LTE at up to 50 Mbps with a fixed amount of data usage per month. Telekom Deutschland offers Magenta Zuhause Hybrid, a combination of DSL and LTE with speeds up to 16 Mbps. The hybrid modem automatically detects the fastest available network. With both operators, the service is a replacement or compliment to fixed broadband; additional services such as TV and telephony are not included. All operators in Germany though are working on rolling out voice over LTE.

In the Netherlands, KPN has started testing VoLTE, but it is not yet commercially available. TV services over LTE are also being tested, for example with Ericsson at a football match in Amsterdam last year.

LTE for rural areas

There are around 330,000 homes and businesses in the Netherlands without access to fibre or cable and too far from the DSL exchange to receive fast broadband, according to the Dutch ministry of economic affairs. Under the EU's Digital Agenda, all homes should have access to at least 30 Mbps by 2020, but the government has said this will be difficult to achieve for the last 5 percent of residences.

Market researcher Stratix looked for the government at whether LTE could fill this hole. It found that 70-80 percent of the addresses could access a LTE network that supports the minimum 30 Mbps. While these speeds are enough for everyday online activities, it may not be enough for critical applications in need of stable, reliable connections or significant bandwidth. This is due in part to the fact that LTE radio networks are shared networks, with no dedicated individual connection.

The ministry is not ruling out broadband over LTE as an alternative for some users, but said this is not a structural solution. The latter will need to come from constructing fixed networks, or rolling out fixed wireless connections that serve a limited number of users.

This research is based on Telecompaper Consumer Panel. The survey was conducted in May 2015 (n=1,615). The same question was asked in May 2013 (n=2,086). Respondents with a home internet connection were presented with a number of statements about whether they would consider switching from their current connection to 4G. Panel members are aged 12-80, and results are stratified according to age, gender and education. For more information about research opportunities with our panel, please contract research@telecompaper.com.


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